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Hair actually does have a limit to its growth. All hair cycles between periods where it grows, and when a new stand appears, which pushes the older, long hair out. Hairs that are generally shorter, like eyebrows or arm hairs, have a shorter growth period before a new hair pushes the old one out. The hair on your head actually grows much faster than many other hairs as well, so with the longer cycle and the faster growth, it can grow to be much longer before being replaced.

I remember hearing that for many women (the cycle does vary from individual to individual, which explains why some men can't grow beards while others look like ZZ Top) the growth cycle ends between the waist and butt.

My speculation would be that hair on the head could grow for longer because there are more capillaries in the scalp, which might lead to more nutrients, higher cell turnover (like you see in dandruff), and hence more hair. That's just a guess, mind you.